The CAMCO saga took one more step towards completion yesterday in a posh midtown Manhattan office as the charged-off consumer receivables portfolio of the Illinois-based debt purchaser was auctioned off to the highest bidder.

Last month, a U.S. District court judge ordered the assets of debt purchaser and collector Capital Acquisitions and Management Corp. (CAMCO) to be auctioned off to the pubic in response to a suit filed by the Federal Trade Commission alleging illegal debt collection practices. Included in the assets was a $1.75 billion portfolio of consumer receivable accounts that the company had previously purchased and worked to collect.

The receiver company assigned to take control of CAMCO’s assets, Le Petomane XII, Inc., had contracted with New York City-based investment banking firm Keefe, Bruyette & Woods (KBW) to conduct the auction. Given the unique nature of the event, a lot of interest was generated in the auction around the debt purchasing industry. President of Le Petomane, Jay Steinberg, commented yesterday at the proceedings that he had no idea a public auction of a debt portfolio would cause such a stir.

Typically, debt portfolios are not offered in a public outcry auction format, a format commonly used for cattle auctions, Beatles memorabilia sales and the like. Debt purchasers use personal contacts and relationships to purchase portfolios. Even with the advent of online debt auction sites, bidders are still protected by a veil of anonymity. So when KBW ran announcements informing the debt purchasing world of a very public auction of very public assets from a very public case involving one of their own, the response was impressive.

“We had some 64 interested parties call in to pre-qualify for the auction in addition to around 25 others calling with interest,” said Mike MacDonald, managing director at KBW.

Ultimately, 34 qualified bidders attended yesterday’s auction either in person or by phone. Although only a handful of bidders were present in KBW’s offices, the immaculately appointed conference room where the auction was held was packed. Industry executives, capital sources and even KBW staffers squeezed into the room to watch the event. And the action did not disappoint.

The $1.75 billion portfolio was divided into four separate pools auctioned off individually. After the four initial auctions were completed, a final auction was conducted for the entire portfolio. If the bid for the whole lot exceeded the aggregate price for the four pools, then the entire portfolio would go to that single bidder.

The first pool auction, for a portfolio of $9.2 million in pledged accounts with cash flow, started off understandably slow with bidders greeting the opportunity with a degree of timidity. Auctioneer Joel Langer kept a light mood in the room and over the phone as he gently coerced the bidders to jump into the proceedings. Once the initial trepidation was squashed, bidding went smoothly with participants pushing the bid up in $100,000 and $50,000 increments. Finally, a winner was declared as the portfolio went to an Ohio-based debt purchaser.